February 22, 2018

‘Triumph of hope over reality’ – strategist bursts market recovery expectations

Global markets tumble after another massive US stock sell-off

“The idea that it’s all done in one sell-off is, I think, probably a triumph of hope over reality,” the analyst said, as quoted by CNBC.

The warning comes as investors are still concerned over the recent sell-off that saw another significant drop in American stocks earlier this month with indexes around the world plummeting amid fears of rising interest rates and higher inflation.

Sell-offs tend to happen in three waves, according to Watling, who refers to market analysis and history.

“You get your vicious first wave sell-off that we had with the high on January 26 in the US, then you get your typical wave two relief rally which we had last week when the SP was up 6 percent, the best weekly performance since 2011, then you tend to get a third wave to either new lows or testing the lows from the first wave of the sell-off,” the strategist told the media.

Watling stressed that prior to the first wave in late January, investors saw “two years when the market pretty much went up in a straight line and the complacency was huge.”

“There’s huge complacency. Everyone’s talking about a ‘healthy market correction’ but generally when you have proper pullbacks people are slightly fearful of the bottom – they’re not regarding it as wonderful. So, typically, that ‘third wave’ is key and I think there’s probably some more downside risk over the next few weeks,” the analyst said.

He added that while he believed equities were still in a cyclical bull market, declining liquidity was “dangerous.”

“This has been the most heavily, liquidity-fueled bull market ever. So sniffing taking it away, which was perhaps what the correction was about in January, is quite a dangerous environment,” Watling said. “I’d be very nervous, in the medium-term, about what happens when liquidity is withdrawn.”

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419440-market-sell-offs-coming-analyst/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Soros investing more money to fight Big Tech ‘menace’

A spokesman for his influential ‘Open Society Foundations’ told Axios it provided an $180,000, two-year grant to the Open Markets Institute last fall for work around web platforms.

Soros accuses Facebook Google of manipulation and deceit

“The Open Society Foundations has long worked on issues involving the free and democratic flow of information and the ways in which a concentration of power can affect knowledge and communication,” said Open Society Foundations acting Co-Director of US Programs Laleh Ispahani. 

He added that Soros’s recent speech at the World Economic Forum (WEF) “reflected rising concern about the effects of a handful of giant internet platforms having so much influence. 

“We’re certainly examining new ways we might address those concerns in ongoing conversations not just in the US but among our foundation colleagues globally.”

Facebook and Google have become “obstacles to innovation” and are a “menace” to society whose “days are numbered,” said Soros at the WEF. He accused the web giants of deceiving users “by manipulating their attention” and “deliberately engineering addiction” to their services.

They have become too powerful and should be broken up, said Soros. He has warned of an “even more alarming prospect” on the horizon if data-rich internet companies paired their corporate surveillance systems with state-sponsored monitoring.

“This may well result in a web of totalitarian control the likes of which not even Aldous Huxley or George Orwell could have imagined,” he said.

According to the billionaire, the companies which he described as “ever more powerful monopolies” are unlikely to change their behavior without regulation. “Their days are numbered,” Soros said.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419436-soros-fighting-big-tech/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Venezuela raised $735mn on launch of oil-backed ‘petro’ cryptocurrency – Maduro

“Today, a cryptocurrency is being born that can take on Superman,” Maduro announced on Tuesday, referring to the US as a comic character. The Venezuelan leader, however, provided no details about the first investors in the ‘petro’, which is backed by the country’s oil, gas, gold and diamond reserves.

“The Bolivarian Republic of Venezuela guarantees that it will receive PETRO as a form of payment for national taxes, fees, contributions and public services, taking as a reference the previous day’s Venezuelan oil basket price with a discount,” says the official website for the newly-launched asset, which is set to go public next month.

Maduro urges Latin American states to join oil gold-backed cryptocurrency project

The official ‘white paper’ about the ‘petro’ emphasizes that the Venezuelan government is also “committed to promoting the use of Petro in the domestic market and making efforts to stimulate its acceptance throughout the world.”

Venezuela’s regulator said last week that it was planning to draw initial investment from Qatar, Turkey and other Middle Eastern countries, as well as from European nations and the US. The US Treasury Department, however, warned such investments would violate sanctions levied by Washington against Caracas, which technically prevents US banks and investors from openly acquiring petro.

The ‘petro’ cryptocurrency was announced by Maduro at the beginning of December as a way “to innovate toward new forms of international finance for the economic and social development of the country.”

Promoting it as the first state-issued cryptoasset, Maduro explained that the purpose of the currency was “to advance the country’s monetary sovereignty,” while the opposition-controlled legislature protested against the endeavor, slamming it as an illegal debt issuance and yet another attempt to circumvent lawmakers.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419397-venezuela-petro-cryptocurrency-maduro/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Canada’s oil crisis continues to worsen

© Saudi AramcoRussia inks huge energy deals with Saudi Arabia, challenging US dominance in Gulf region

This pipeline capacity problem has been forcing producers to pay higher rates for railway transportation, which has naturally hurt their margins in no small way. Now, there is a shortage of rail cars as well.

The situation is going from bad to worse for Canadian producers who can’t seem to catch a break. Canadian railway operators are fighting harsh winter weather and finding it hard to supply enough cars to move both crude oil from Alberta and grain from the Prairies.

The harsh weather is just the latest factor, however. Before that, there was the 45-percent surge in demand for rail cars from the oil industry, Bloomberg reports, citing Canadian National Railway. The surge happened in the third quarter of last year, and Canadian National’s chief executive Ghislain Houle says that it took the company “a little bit by surprise.” This surprise has led to “pinch points” on the railway operator’s network, further aggravating an already bad situation.

As a result, crude oil remains in Alberta and prices fall further because Alberta is where the local crude is priced, Bloomberg’s Jen Skerritt and Robert Tuttle note. In fact, Canadian crude is currently trading at the biggest discount to West Texas Intermediate in four years, at $30.60 per barrel. The blow is particularly severe as it comes amid improving oil prices elsewhere driven by the stock market recovery.

The light at the end of the tunnel is barely a glimmer. Despite federal government support for the Trans Mountain pipeline expansion project, it is still facing obstacles that may result in it never seeing the light of day. The project that would boost the current pipeline’s capacity from 300,000 bpd to 890,000 bpd, accommodating much of the increased Alberta bitumen production, is being challenged in court and Kinder Morgan has yet to collect even half of the necessary permits to proceed with it. There are no other major pipeline projects in Canada that have been approved.

Goldman: Oil to top $80 within six months

Meanwhile, the news from the research front is not good, either. Back in September, media outlets reported on an accidental discovery that could make transporting bitumen by rail much safer by turning the crude into pellets. This would minimize the danger of a spill but, some said at the time, would increase transportation costs.

Canadian national Railway is also working on its own bitumen pellet technology it calls CanaPux, but for now it has not yet been commercialized, perhaps for the same reason of cost. Yet bitumen pellets, some observers note, could be the best solution to the current conflict between Alberta and British Columbia. The latter is doing everything it can to stall Trans Mountain’s expansion citing environmental concerns. Alberta stopped importing B.C. wines in retaliation.

But bitumen pellets are safe, their creators say, so B.C. would have nothing to worry about. And yet, like grain, these pellets would need rail cars to transport them should this option be chosen despite cost considerations. Canadian National says it plans to hike its capex to $2.6 billion this year in response to the shortage. The effect of the surprise jump in demand for railcar capacity from the oil industry should also subside eventually. The only question is how much all these factors would hurt Canada’s oil production growth in the meantime.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/419339-canadas-oil-crisis-continues/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Saudi Arabia wants investors back after anti-corruption purge

Sources told Reuters that during recent meetings with the local business community, Saudi officials tried to reassure them that another wave of mass detentions was not on the cards.

Riyadh nets $106bn as Saudi elite released from Ritz

“They were told the anti-corruption campaign is done: continue with your business as normal and invest in the economy,” said one of the sources, a senior banker.

The officials also told business leaders they would not change the country’s business culture so radically that normal business ties are damaged. They understand business payments to third parties were sometimes required, said one of the sources.

In November, Saudi Arabia launched an anti-corruption purge, arresting hundreds of the country’s elite, including billionaires, government ministers, and royal family members. They were arrested and held in the Ritz-Carlton hotel in Riyadh.

The government said it has raised more than $100 billion from the financial settlements made with the detainees in exchange for their freedom. That came mostly in the form of land, stakes in businesses and other such assets rather than cash.

The officials tried to dismiss worries about the way the crackdown has been conducted.

“It’s true we could make mistakes here and mistakes there. Saudi Arabia is not a perfect country. Saudi Arabia is like any other country. The road to success is always under construction and the whole momentum of Saudi Arabia is going toward that end,” said Saudi Minister of Commerce and Investment Majid bin Abdullah al-Qasabi during the World Economic Forum in Davos.

Saudi purge more ‘palace coup’ than anti-corruption ‘jihad’

Sources say that despite the government’s attempts to calm the kingdom’s elite, many remain worried they could be detained at any time as instability has become the new norm.

“The whole business community is traumatized,” said an unnamed Saudi businessman.

One banker who’s familiar with the matter said some of those released from detention had been told they may be asked to help fund certain projects.

“There’s an understanding that the government might at some point tap those released on the shoulder and say, ‘Hi, we’re building an infrastructure project and need some funding: Please contribute,’” the banker said.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419319-saudi-prince-corruption-crackdown/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Putin signs law on extension of capital amnesty for Russian businesses

A total amnesty for all funds returning to Russia follows an anti-offshore bill requiring individuals and businesses to report foreign profits. The bill was aimed at curbing the outflow of capital from Russia, which was estimated at over $2 trillion in recent years.

Russia warns time ticking away on businesses tax amnesty

The bill was explained by Deputy Prime Minister Igor Shuvalov as allowing people who have made any mistakes in their business activities to declare the property and become completely law-abiding citizens.

The laws were earlier adopted by both chambers of the Russian parliament.

It’s the second stage of the capital amnesty, which commenced in March 2017. In this case, special declarations can be submitted both by individuals who haven’t done that before, and those who participated in the first stage.

According to the documents, published on the official portal of legal information, all the guarantees for those who used the amnesty of capital in the first stage in 2015-2016 will be fully preserved.

Putin said earlier that the extension of capital amnesty, which is supported by international financial institutions, will add stability to the Russian business environment.

Voluntary declaration of assets and accounts in banks has started in Russia from June 1, 2015. Individuals had the right to submit to the tax authorities a special declaration with the information about the property, controlled foreign companies, accounts in banks located outside Russia. That could be done in exchange for exemption from tax, administrative and criminal liability for tax and customs duties payment evasion and failure to comply with laws on currency regulation and currency control. The amnesty covers all revenues, operations and transactions related to overseas assets and accounts.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419305-putin-capital-amnesty-extension/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Venezuela about to launch its ‘petro’ cryptocurrency

The new cryptocurrency will be limited to 100 million units, called the mene. The petro token will be backed by Venezuelan oil, gas, gold and diamond reserves. 

Venezuela’s regulator said last week that it would draw investment from Qatar, Turkey and other Middle Eastern countries, as well as from European nations and the US.

Maduro wants joint cryptocurrency mechanism within OPEC

The Latin American country is turning to virtual currency as a result of US sanctions, according to Venezuelan journalist and political scientist Francisco Toro.

“They have been trying to figure out ways to get around anti-money laundering sanctions provisions, and crypto is maybe one way they can do that,” he told CNBC.

“I do think that part of this is about getting investors from non-traditional lenders, from Russia and China, to put in some more money, to lend fresh cash. The financial sanctions — the US sanctions, the European sanctions — are not the main reason Venezuela can’t raise financing.”

The ‘petro’ cryptocurrency was announced by Maduro at the beginning of December as a way “to innovate toward new forms of international finance for the economic and social development of the country.”

Maduro explained that the purpose of the currency was “to advance the country’s monetary sovereignty, to carry out financial transactions and to defeat the financial blockade against the country.”

“We are facing a financial war against the country which we have denounced, and the opposition has denied. There are business people who are unaffected by Donald Trump’s blockade. With this, we will join the 21st century,” he said.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419235-venezuela-petro-pre-sell/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Saudi Arabia says European businesses are helping Iran finance terrorism

“We believe that a large percentage of the Iranian economy is controlled by the Revolutionary Guards and companies associated with the guards. And we believe that any dealings with those companies only serve to enrich the Revolutionary Guards and cause them to cause more mischief within the region and the world,” Saudi Foreign Minister Adel Al-Jubeir told CNBC.

The claims come as Iran has inked deals worth of billions dollars with European companies since international sanctions were lifted in exchange for limitations on its nuclear program. A whole range of European giants, including Airbus, Siemens, Peugeot and Total have signed major contracts with Iranian state and private companies.

The Revolutionary Guard is reportedly Iran’s most powerful security entity, which holds control over a significant share of the country’s economy and has huge influence within its political system. The military branch has been accused of backing groups like Hezbollah around the Middle East.

The comment by the Saudi official echoes similar claims by US national security advisor H.R. McMaster, who said that European nations doing business with Iran were writing a blank check to the IRGC.

Al-Jubeir also said that the 2015 deal failed to resolve the issue of Iran’s “radical behavior.”“They also do not deal with the issue of Iran’s support for terrorism,” he stated.

Tehran has repeatedly denied accusations of sponsoring terrorism and that it is abiding by all the parameters of the nuclear agreement – a claim being backed up by the UN inspection body. Moreover, Iranian Foreign Minister Javad Zarif accused the US of jeopardizing the deal.

“I believe President Trump has tried to walk away from that deal from day one of his presidency, and he has done everything in bad faith to prevent Iran from enjoying the benefits of the deal already. So we believe the United States is already in violation of very serious and important provisions of the nuclear deal,” Zarif said, as quoted by CNBC.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419233-saudi-iran-europe-sponsors-terror/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Top European banker arrested in money-laundering probe

The arrest comes four days after the US Treasury accused Latvia’s third-largest lender of “institutionalized money laundering”. According to the US officials, Latvia’s ABLV bank had made money laundering into “a pillar of the bank’s business practices.”

“Illicit financial activity at the bank includes transactions for parties connected to UN-designated entities, some of which are involved in North Korea’s procurement or export of ballistic missiles,” the US Treasury said.

Switzerland United States are the world’s most corrupt nations – report

Following the report, Latvia’s central bank governor Ilmars Rimsevics was interrogated for eight hours on Saturday. “We are facing a crisis of the international reputation of the Latvian financial system,” said Latvian Finance Minister Dana Reizniece-Ozolaana. Prime Minister Maris Kucinskis has called for the resignation of the central bank governor.

ABLV claims the US reports are based on unfounded and misleading information. The bank is based in the Latvian capital Riga but also has subsidiaries in Luxembourg and the US.

The European Central Bank (ECB) stopped all payments by ABLV on Monday. “In recent days, there has been a sharp deterioration of the bank’s financial position,” the ECB said in a statement on Monday.

“A moratorium was considered necessary given that the bank is working with the Latvian central bank and authorities to address the current situation.”

To stabilize the financial situation, ABLV asked the Bank of Latvia to issue a loan of €480 million, offering securities as collateral. It loaned ABLV €97.5 million on Monday.  Last year, two Latvian banks were fined for allowing clients to make payments to North Korea.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419229-latvia-central-bank-corruption-ablv/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Saudi women no longer need male permission to start business

“No need for a guardian’s permission. Saudi women are free to start their own business freely,” the ministry’s spokesperson Abdul Rahman Al-Hussein tweeted. He also used a hashtag which translates from Arabic as “No Need.”

Women in Saudi Arabia have traditionally been banned from working outside the home but rules have been relaxed in recent years. To start their own businesses, travel or enroll in classes, they had to ask permission from a male “guardian” – a husband, father or brother.

© Faisal NasserOver 100,000 Saudi women apply for 140 passport control jobs

Hiring women is now a key part of Saudi Arabia’s plan to overhaul the oil-dependent economy, known as Vision 2030. The reform also aims to raise the proportion of Saudi women that are active in the workforce from 22 percent to 30 percent. Female unemployment in the kingdom stands at around 33 percent, compared to an overall rate of 12 percent.

“I believe this new approach will open the door to [women] in our homeland to highlight their talents and ideas and translate them into a realistic business with a worthy financial return,” Saudi law consultant Dima Al-Shareef told the Arab News.

“We are witnessing a new era in the empowerment of Saudi women, in the commercial sphere in particular,” she added.

Earlier this month, Saudi Arabia’s passport office announced 140 jobs for women at airports and border crossings. It received 107,000 applications within a week while the job posting has been viewed more than 600,000 times.

Last year, the Saudi king issued a royal decree allowing women to drive cars and attend sports events. The move has been strongly opposed by some of the kingdom’s prominent clerics.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/419220-saudi-women-business-permission/?utm_source=rss&utm_medium=rss&utm_campaign=RSS